According to Urban Company CEO Abhiraj Bhal

About 183 employees at Urban Company, across designations & roles, were eligible to participate in the latest Esop transaction at Urban Company, of which about 120 people, ranging from call centre executives to senior leadership, at Urban Company participated.

Existing investor in Urban Company (formerly UrbanClap) Vy Capital has picked up employee stock options (Esops) worth about $5 million in Urban Company through a secondary transaction.

The UAE-based fund VY capital, which also counts online food delivery major Zomato, NoBroker and MagicPin among its portfolio, has been an investor in Urban Company since 2017.

It holds 10.3% share in Urban Company, according to data collated by Tracxn.

According to the CEO of Urban Company Abhiraj Bhal, about 183 employees, from different designations were eligible to participate in this ESOP transaction event, of which about 120 Urban Company employees, ranging from call centre executives to senior leadership, participated.

In 2017, UrbanClap, as it was known earlier, had undertaken a $1 million Esop sale round, which was followed by a $2.5 million secondary round in December of 2018.

That coincided with the Urban company’s primary fundraising round, in which it had raised $50 million led by London-based firm Steadview Capital.

The latest Esop sale was around — Rs 1,10,000 per share — at which the Series E secondary transaction held last July, according to Abhiraj Bhal, Urban Company CEO.

This also comes at an opportune time for startup employees, who have been hit hard by a combination of layoffs, and payouts as India’s consumer internet companies struggle to recover from the impact of the Covid-19 pandemic and a lockdown.

“I think in a very interesting way, allowing team members to take some money off the table does two things – it makes the instrument very real, so that there is no longer this view that this is paper money. It is real cash, and they start thinking its better than cash, because they won’t earn similar returns even if they put it in any market instrument, given the value appreciation every 18 months or so” Abhiraj Bhal, Urban Company CEO.

Under Urban Company’s Esop programme, every employee gets Esops at a face value of 1rs and the Urban Company’s prevailing stock price has crossed Rs 1 lakh.

“Secondly, we also have accelerated vesting; if Urban Company goes public, or if there is a strategic sale, it doesn’t matter what has been vested with you till date, the rest of the shareholding that is unvested vests in an accelerated fashion, which is very, very friendly for employees,” Abhiraj Bhal, CEO of Urban Company said.

Third, there’s the concept of a no-hold period.

“We have kept an infinite hold period. Urban Company won’t force our employees to exercise any time really. It’s up to them. We have a vesting schedule of 25% each year over four years,” CEO of Urban Company added.

Founded by Abhiraj Bhal, Urban Company CEO Varun Khaitan and Raghav Chandra (Co-founder), Urban Company offers spa, beauty, grooming, repairs and cleaning services via its apps. Urban Company bridges the gap between trained service professionals and consumers seeking services from professional service providers. The platform earns its revenue through a commission fee model based on transactions made on its website and mobile application.

Urban Company’s July revenue was at 77% pre-Covid-19 peak in February, and it expects to fully recover in the next 1-2 months.

Urban Company said it was seeing faster recovery of in-home services like repair, painting, and pest controls, home cleaning – reaching almost 90% of pre-Covid-19 levels in July.

In August of last year, Urban company had raised $75 million in a Series E round led by Tiger Global Management, valuing it at close to $1 billion.

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